Malt drinks, which look like cola but have a strong bready character, have been popular in Colombia and Venezuela for ages, but are catching on quickly in other Latin American markets, even as consumer spending is crimped in some markets by economic weakness.

SABMiller, the No. 2 brewer worldwide but No. 3 in Latin America, is also exploring complementary products like shandies and ciders, which are gaining popularity in the United States, as it navigates an economy that is still growing, but less than before.

“It’s not that we’re running off to other beverage categories. The core of our growth opportunity is beer,” said Karl Lippert, president of SABMiller Latin America, in an interview last week at his new Miami office. But malt, he said, is “a lovely business”.

“It’s entirely complementary to the beer business because you make the wort as if you’re making beer and then you finish off the product without the fermentation process,” Lippert said of the liquid extract made from ground malt and grain. “It’s quite a unique phenomenon.”

Other brewers, including the region’s No. 1 and No. 2 players, Anheuser-Busch InBev (ABI.BR) and Heineken (HEIN.AS), respectively, also sell malt drinks, which are more easily made by brewers than traditional soft drink makers since they are made from the same liquid as beer, just bottled before fermentation turns sugar to alcohol.

SAB’s most established malt market is Colombia, where its Pony Malta has been a staple for over 50 years. It is the nation’s second-largest soft drink, with market share of around 9 percent, Lippert said. SABMiller also sells Pony in Ecuador, ActiMalta in Honduras and El Salvador, Malta Vigor in Panama and Maltin Power in Peru.

The drinks are popular with mothers and children, since they have various nutrients and are viewed as healthy. They are also popular with construction workers who often use them as meal replacements, he said.

Malt drinks account for about 3.4 million hectoliters, or about 6 percent, of the volume SABMiller sells in Latin America, Lipper said. He expects to reach 5 million hectoliters in the next three years.

That implies growth of about 50 percent, which will far outpace that of beer. In the six months ended September 30, SABMiller’s sales of lager in Latin American rose 4 percent.

The company also recently launched Maltizz in Colombia, which has a light straw color and is meant to be lighter and more refreshing than traditional malts. Lippert said Maltizz, which tastes like a cross between a Pony Malta and a lemon-lime soda, is so far performing well.

Malt is also very popular in Venezuela, where it is made by Empresas Polar. Other brands made by rivals are sold in the Dominican Republic, Costa Rica and Puerto Rico. They can also be found in some U.S. cities including Miami and New York.

SABMiller also sells about 500,000 hectoliters of malt drinks in Africa, where it introduced them in 2010.

COOKING AT HOME

Overall, London-based SABMiller is more focused on growing organically, with its own development, rather than moving into new markets through acquisitions.

“We think we have significant potential to grow in our existing markets because consumption in our markets is relatively low,” said Lippert in a 34th-floor conference room overlooking Biscayne Bay.

AB InBev controls more than half of the Latin American market, helped by a big presence in Brazil. It also plans to buy the half of Mexican brewer Grupo Modelo GMODELOC.MX that it does not already own. Heineken has nearly 16 percent of the market, since buying the beer division of Mexico’s Femsa (FMSAUBD.MX) in 2010.

Brazil and Mexico together account for some two-thirds of the Latin American beer market, Lippert said.

The remaining third is where SABMiller plays, deriving its 14 percent of the Latin American beer market through leading positions in the smaller nations of Colombia, Peru, Ecuador, Panama, Honduras and El Salvador.

Within soft drinks, Coca-Cola is the region’s leader, with nearly 36 percent of the market, according to Euromonitor International. PepsiCo is second with 12 percent, while France’s Danone (DANO.PA) is third with 11 percent.

Some beer markets not already dominated by another international player are Belize, Costa Rica, Guatemala, Nicaragua and Venezuela, Lippert said. He did not rule out acquisitions by SABMiller but said some of those markets were either too small or too volatile.

“Business is not just about buying things,” Lippert said. “You also have to cook at home.”